Iofina Share Discussion Threads

[superg1] 01/5/2014 10:02

Mad

They add this, which is a fair point

This valuation could prove to be overly conservative, but we need to see operational stability and further production history before we can be
comfortable with higher figures.

They also say that IOF intend to publish monthly production rates which is a great imo.

A nice gap left for any successful water permit.

They anticipate an iodine flat rate of $40 per kg. However looking at Chile costs (as in recent posts0 it looks like a price must kick upwards at some point. SQM closures in Oct 13 and Nov 13 have yet to embed themselves in the market.

So I'll be keeping a close eye on the Chile folk, who have gone mysteriously quiet from the shouting and bragging of about a year ago. They all went mad chasing the price and it seems have well and truly got themselves in a hole.

The SQM report is full of extra risks not mentioned before, and the gov favours they used to get have gone.

Analysts have started to move SQM from negative to neutral and higher, but haven't spotted the pending law changes and issues that we have.

[captain_kurt] 01/5/2014 10:01

From Numis note

"Iofina to report iodine production on a monthly basis and see this as a key trading indicator for investors and a method of de-risking our full year iodine forecasts"

[superg1] 01/5/2014 09:44

Algorta Norte profits H1 2103

Minera North Algorta a milestone in its progress towards the final consolidation of the project. In this period the company had revenues of U.S. $ 56.2 million and an operating cost of $ 38.8 million.


For H1 2013 prices were in the $50 to $55 range average.

If we compare that to now $10 per kg has gone.

Noting Algorta's revenues that would be roughly 1000mt produced, $10 per kg down now meaning the $10 mill profit rate has been wiped out. It also suggests a production cost of over $37 per kg.



They did intend to get production up to 3000mt this year, but a tall order imo to get add 2000mt for H2. Maybe they did and shot themselves in the foot re prices.

I didn't think they realised Cosayach would be so aggressive on price, but it's rumoured Cos are in the poop and have to.

Algorta's production cost may have come down on economy of scale, but power prices rose 12%. So the extra gets wiped out due to costs rises.

Going back to SQM 2011 to 2013. Iodine price rise 47% gross margin down -2%.
costs are killing them. Algorta will be in the same boat.

IOF report under $30 opex while stuttering and stumbling along and intend to cut costs drastically through this year, and then target lower cost sites.


Yes TW Chile guys are really on their ass, with it would seem SQM probably the only ones making money. Which is a very good reason why IOF is a fantastic prospect in that sector. Yet you fail to see it.

'They' must have known, not really the muppets are out, because they are muppets and are oblivious to things they may stare others in the face, King rat kick them off the ship, they didn't abandon it.

Drastic action was needed and it was taken, and if you think such matters were in play for some time, then it shows your lack of understanding of how a dynamic boss can change things so quickly, and that's why we like the guy. His dynamic nature, pace of thought, and decisive action is first class.

My Big probably realises what a diamond the guy is and backs him. While there is risk, the plan will be reset to the direction it was supposed to be on, and far more careful selection going forward on who to choose (CEO) to action it.


IOF report under $30 opex while stuttering and stumbling along and intend to cut costs drastically through this year, and then target lower cost sites.

[beercapafn] 01/5/2014 09:39

that's quite a down grade from 2.56 ? madchick

[madchick] 01/5/2014 09:34

I see numis have reduced their target to 47p (saw that on LSE under broker ratings). Hopefully this will change once IOF announce what they are going to do and when with the additional funds. Even so, I feel it's disappointingly low, but maybe it's setting the scene for upside.

[superg1] 01/5/2014 09:12

SQM mines proven reserves individual mines

Pedro de Valdivia nitrates 7.1% cut-off grade 6% (same at all mines) iodine ppm 369

María Elena Nitrates 7.2% iodine ppm 416 cut off 300ppm


Pampa Blanca Nitrates 5.6% (below cut-off) iodine 544ppm (they closed the mine in 2010)

Nueva Victoria 5.7% nitrates (below cut-off) iodine ppm 442 (cut off 300ppm)

I believe the recently suspended El Toco mine is part of the Nueve Victoria group. The iris 'plant' stopped too in Nov 13.

'Operations at the El Toco and Pampa Blanca mines were temporarily suspended in November 2013 and March 2010 respectively. Operations at the Iris Iodine Plant were temporarily suspended in October 2013.'

The Nueva Victoria area accounts for the vast majority of iodine (6000mt) they are only on about 8k-9k at the moment.

That area is where the 570 litre per second water rights exist. If the 150 rule kicks in, the forecast is it will start to impact mines in 2016. The Neuve mine will be impacted and the majority of their iodine production will be hit by material opex increases.

Based on the cut-off grades and recently closed operations, I suggest any move towards seawater (which seems inevitable) makes SQM iodine/nitrate mines unviable (at these prices).

That excludes the other rising cost factors in Chile.

I hope the above explains why I think in the next year or two iodine prices will have to rise significantly from this base. That or a few Chile mines will close. But of course there would be an extreme shortage of iodine if Chile mines closed (58% of world supply) which would make prices rocket. While Cosayach hit desperation mode prices could fall slightly further in theory, as others sell above their rates.

So all the evidence tends to suggest that over the next 2 years, iodine prices will rise.

$60 to $70 per in 2 years seems reasonable to me considering all the changes going on in Chile, rising costs, and the seawater issue.

There seems to be a fair chance that some smaller mines will close. Rumours already re Cosayach money problems, and they are the ones blamed for the low prices as they are just trying to get cash asap. The owner has his own court cases on going, one for a claim for $100 mill.

[superg1] 01/5/2014 08:28

For the number crunchers on here.

I know I tend to go on a bit about the finer detail for things down the road but the 359 page full report document issued by SQM has some additions that make me think they are potentially going to struggle.

That looking ahead slant had us on IOF threads warning against any investments in Chile as it was a bubble about to burst on rocketing costs. The big analysts were pushing Chile related stocks as outperform, they did that on SQM. Wish I has gone short on SQM after realising the issues.

I have just checked the last 5 years of full reports. This year is the first year they have started talking cut-off grades. I thought I must have missed them previously but they are not in there.

SQM have also recently gone from saying for years, we are the lowest cost producer, to we are one of the lowest.

Iodine opex is off-set against nitrates production. As mentioned before I note the nitrates cut-off grade is 6% and a couple of mines are below that rate.

For some mines they mention 300ppm iodine rates, with a proven range of 370ppm to the high 400's.

5% extra tax to come, opex to rise significantly when they eventually have to use seawater (large capex too). Bosses and connections facing fraud charges which they add in the document as a significant risk to their business. New labour laws shown as a risk and details recently of how badly they are treating them in a media report.

2011 to 2013 a 47% increase in the iodine price but a -2% move on gross margins.

SQM closed the El Toco mine and the iris plant in Oct/Nov last year. Clearly they are not economical at these prices.

With rising costs that cut-off grade will continue to push up. That is why iodine prices will have to go up at some point, otherwise with all the pressure even the likes of SQM may have to close further mines.

Mines with higher costs, which is practically all of them in Chile, must be suffering significantly.

[woodpeckers] 01/5/2014 08:19

Masurenguy, I'm hoping they are just looking a day or two ahead.....

[orslega] 01/5/2014 08:17

what about this spread then...bid 43p - 82p offer!

2014-04-30 17:53:58 45.63 158,413 43.00 82.00 ? 72,285 O

[cyberbub] 01/5/2014 08:13

Wow - the spread really is a full 2p - I am getting 42.65 - 44.65 for 30K shares... are they trying to deter buying?

[masurenguy] 01/5/2014 08:07

Me too but then the mid prices that they are showing on a number of my other holdings are also wrong. For example CMS is @66p but shown as 74.5p and ETO is @297.5p but shown as 315.7p etc etc. Obviously some glitch in their software !

Edit 08.18: I've since spoken to them and the prices have now all been corrected.

[woodpeckers] 01/5/2014 08:00

Is anyone else experiencing the same as me? I have my holdings with Barclays and each morning they have my Iofina holdings worth way above present value, this morning 62.5p.

[1madmarky] 01/5/2014 06:59

Spike - think it is nervous exhaustion

[count chris] 30/4/2014 22:19

Re @ it's called 'the at sign' or if you are sure the person you at speaking to knows what you are talking about and the context is unambiguous you may just say 'at' (e.g. when saying an email address)

[mister penis] 30/4/2014 18:43

I have a hundred weight of stick on opposable thumbs that I am trying to get rid of after a failed business start up.

Let me know if there is any interest.

[monkeymagic3] 30/4/2014 18:39

I might start a new thread specifically to discuss opposable thumbs and monkey butt holes.

I have lots of material.

[woodpeckers] 30/4/2014 18:14

Well no one can say you don't learn anything on the Iofina board! What a pleasure it is to read nowadays! :-)

[freddievas] 30/4/2014 17:48

In Spanish, @ is known as "arroba". I rather like that too.

[crosseyed] 30/4/2014 17:03

A common name for the @ symbol in french is 'escargot'. I like that one.

[1madmarky] 30/4/2014 17:00

Yeah, £1 pa, that shows commitment and belief in your and the company's ability. Gets my vote.

[diggulden] 30/4/2014 16:24

Taking a £1 salary for the rest of the year not enough for you?! For me, that is the same as buying shares.

[meb123] 30/4/2014 16:15

Would be good if there were some director purchases - or are they barred for now ? Does anyone know when are they entitled to buy under AIM rules ?

[phsycho] 30/4/2014 15:30

Is that an ironic "no" spike.. :)